All Posts Tagged: business investment

U.S. Outlook: Behind the Q1 GDP headlines, and what it means for Q2

Scott Anderson
Chief Economist

We were bracing for a soft Q1 GDP print this morning, primarily due to a sharp slowdown in real consumer spending in the first quarter.

Crowds of shoppers walking in a mall, focusing on their walking legs.We got the drop we forecast, as real consumer spending growth slumped to 1.1% from a 4.0% annualized growth rate in Q4.

For more on this, see highlights of my report below, followed by a link to the full U.S. Outlook, delivered on April 27.

Key observations:
  • The decline in consumer spending was driven by a 3.3% decline in durable goods spending, primarily motor vehicles.
  • Business equipment spending also came out on the weak side.
  • We expect the drop in real consumer spending growth in Q1 to be partially reversed in the second quarter as recharged savings, pent-up demand, and lower credit card balances entice consumers to spend more freely.
  • Our forecast for Q2 GDP growth improved to 3.0% from 2.6% prior to today’s release.

Read my full report.

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U.S. Outlook: More signs of weakness in global production

Scott Anderson
Chief Economist
Graph showing quarterly GDP performance, both actual and forecast

We received more confirmation this week that global manufacturing activity in September continues to slow, though there are no clear signs, yet, of a global recession.

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U.S. Outlook: Uneven growth with whiffs of higher prices

Scott Anderson
Chief Economist
Graph showing the downward movement of the trade deficit.

This week’s U.S. Trade report for March revealed an even more lopsided trade performance than was estimated in last week’s Q1 GDP report.

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